Three Golden Rules of Property Investment
A perfect time to invest in property
There’s no question that property investment is on the rise. With landlords in the UK collectively owning almost £1 trillion worth of property, more and more people are looking to buy to let as a way to generate income. As a result of this rapid increase in sales, those who may never have considered buy to let in the past are now looking to property investment for a number of reasons, whether it be to build a strong portfolio of properties or as a means for their retirement.
There are a number of different areas a first time investor has to consider, depending on what their expectations are from their future investment. Whether it be student, renovation, off plan or hands-off, our experience has seen any successful buy to let investor follow a similar set of guidelines.
Number 1: Consider all locations
Quite often we come across investors who only wish to purchase buy to let property close to where they live however, by limiting location choices, investors could be missing out on some of the great returns that are to be generated around the UK. Some of the best locations and buy to let hotspots may not be in the town in which you live so it’s wise to consider areas beyond your own doorstep.
When it comes to buy to let, you should look for rental appeal rather than what would appeal to your personal taste. Consider proximity to local amenities, good transport links, connection routes, schools (if you’re targeting families), city centre (if you’re targeting young professionals) and low maintenance. Many successful investors choose a hands-off approach, meaning they have little dealings in the day to day running of the property and therefore, don’t have to live within close proximity of their investment at all. It’s a great way to reap the benefits of property hotspots all over the country.
For the last two years, HSBC listed both Manchester and Liverpool in the top 10 buy to let property hotspots in the UK. With potential yields of around 8%, investors could be missing out by not considering these areas in their property search. City centre property sometimes generate higher yields for a buy to let investment and the best returns tend to be available in the North and in the Midlands as opposed to London and the South of the UK. While some may find it more convenient to be just a stones’ throw away from their property, those looking for profit who aren’t near any of the high-income generating places should really consider widening their search.
Number 2: Get professional advice
The aim of a property investment specialist is to help establish your wants and needs from an investment, and then find a property to suit. Regardless of whether you’re a first time investor or an experienced one, specialists like Sequre Property Investment can guide investors through the process to ensure objectives are being met. There can be many things to consider and it could be overwhelming for those unfamiliar with buy to let, so by using a buy to let specialist, you get professional and experienced help from the start of the process, to the very end. Even for experienced buy to let investors, by using property investment specialists, you can get access to opportunities before they enter the open market and often at a discounted price. It may also help when considering new locations or property types.
Number 3: Do your research
Again, whether you’re a first time investor or an experienced one, it’s essential to do your research and decide what you want from your investment. For example, you may want an income generating property with potential for good capital growth or, you might find yourself less interested in capital growth but focussed on high returns. You may even consider somewhere overseas that you can escape to a few times a year but use the investment as an income generator in the meantime; either way it’s vital that you do your research and due diligence on any property prior to purchase. This is where a property investment specialist can really add value, as the due diligence would have been done prior to marketing the property ready for you to evaluate.
As with anything, there are potential risks that could occur with any sort of investment so it’s best practice to evaluate and prepare for any eventuality. If you’re a hands-on investor, all responsibility is down to you as a landlord to rectify any issues from tenants and these will come directly to you at any given time if they happen. Property management can be a full time job in itself and issues can arise at unsociable hours so it pays to be organised, prepared and have a contingency budget. Obviously if you’re a hands-off investor with an experienced lettings/management agent you can rely on, your agent will take care of these issues and you can rest assured that your property and its tenants are well managed.
When investing in buy to let property, there are many options available. Whilst the benefits of each option may differ, the foundations of a successful property investor ultimately remain the same.
First time investors
For any first time investors contemplating the idea of a buy to let investment, the first stepping stones are often the most difficult. Sequre can help guide you through the process from start to finish. Call our friendly team today on 0800 011 2277.